[Craig_Rokke]

Good news--the local paper did a piece today on the USGA's look at Merion for another US Open. They're undertaking a study, with the results due early next year, that will determine just how much it would give up in terms of spectators and potential revenue, to bring the Open back to Merion for a 5th time.

"It's a long shot", concedes David Fay. "The whole thing would have to be downsized. I would be hard-pressed to see a US Open at Merion with more than 18,000 a day."
Aside from the issue of Merion's test as a golf course, the logistical problems remain the biggest hurdle for Merion.
"The US Open underwrites everything else the USGA does.
Everything else loses money except for the Open," admits
one USGA insider.

Fay has a renewed appreciation for the course, having  played in an annual tournament there in September. "I don't think the game has passed Merion by," Fay said. "In my opinion, it could still be a US Open course, at least inside the ropes." Other officers in the USGA also agree that it is important to show that the Merions of the world have not been made obsolete by the modern game.

I hope the feasibility results are favorable!

[SBell]

Next Open date is 2010. By then, assuming distances continue only going up on the average they have the last five years, #1, #7, #8, #11, and #12 at Merion may be DRIVEABLE by the average tour player.

Who are they kidding?

[TEPaul]

So what? Let 'em try to drive them and then we'll see what they make!

I can just see Woods on #1--SWOOSH, "fade, please fade", BOOM, CRASH (sound of a broken windshield), " I think I'll hit a provisional!"

[Mike_Sweeney]

I personally find it hard to hold 8 and 11 with a lob wedge from 50 yards !! Can Tiger hold them with a driver. Yea I know he is good but.... Thus, I agree with TomP let them go for it, it would make for some interesting recovery shots out of Cobbs Creek.

However, David Fay showed his cards. Merion is too small for corporate tents and 25,000 + fans. The US Open is to the USGA what Division I Football is to a number a colleges. It pays the bills for all the other events/sports teams, and they will prostitute (currently a separate thread on GCA ! ) themselves for the benefit of the larger entity.

[Tommy_Naccarato]

Mike, You couldn't have put it any better.

[Mike_Sweeney]

Tommy,

Just remember that it is okay when The Jesuits of Boston College prostitute ourselves against The Irish !!


Mike Sweeney
Boston College 1984

[TEPaul]

At least it's encouraging that the USGA is taking another look at Merion for an Open for whatever reason. It's also encouraging to hear Fay say that he thinks the course could handle another Open 'inside the ropes'!

It may also be prudent for Merion to state publicly before the USGA's feasibility study comes out that the club would not even consider a USGA invitation to hold the Open UNLESS the USGA capped the crowd at app. 18,000 spectators per day!

And I also question Fay's remark the the US Open is the only money maker for the USGA and everything else loses money. To go from a couple million dollars to a high of app $200+ million since Hannigan stepped down and Fay came in sure did not all come from US Opens--it came from successful portfolio investments!

[Bob Chapman]

I am confused. The USGA loses money on its events, except the US Open, so they need it to go to certain facilities to help fund those other events? This makes it sound like they have a very tight budget that requires the Open make maximum profit and thus forever skip classic courses limited in space for those that make the most money?

So where does the money come from to buy the Russian Tea Room? $16 million I believe Golf World reported??

And what about member dues? I have a friend who is a rules official, and I know his expenses are not paid, so why is it so expensive to run a women's Senior Amateur??

[TEPaul]

In my opinion if the USGA thinks they're hurting for money they should use what money they have to do one of the things they're there to do which is put on 13 good national events, certainly including the US Open at the best and most interesting sites!

They should stick to what they do best and if it's money they're now worried about they should get the hell out of social engineering and leave that to the local and US governments!

If they think they need to treat the US Open solely as a "cash cow" so they can stay in social engineering, I'm not for it at all!

[Bob_Huntley]

Bob Chapman:

Are you related to the late Richard Davol Chapman?

Bob

[Patrick_Mucci]

Bob Chapman,

My club in NJ hosted a Senior Women's Amateur, and you're right it isn't a large budget item, but it still operates at a loss for the USGA, as I would imagine most, if not all of their other competitions do.

The US OPEN is the only event that makes a profit, and in that context, it supports/subsidizes all of the other competitions.

With respect to the Russian Tea Room building on 57th street,
if they buy it for $ 16,000,000 and sell it five or ten years from now for $ 28,000,000 would you say they mispent the money ?  And, if they sell it in five or ten years for
$ 12,000,000, and write off the lose against gains, is that so bad ?  This issue seems to be much ado about nothing.

TEPaul,

You may recall, after the Ping lawsuit, the USGA saw that they had rather shallow pockets and began capital campaigns, associate programs, etc.,etc., to build up a sizeable cash reserve.  Prudent investment is only beneficial if you've got the money to invest, which they acquired as indicated above.  However, these last three years haven't been kind to most, and I would think that the USGA is not immune.

When they had no money they couldn't take an aggresive position with the manufacturers.  They recognized that, and accumulated substantial assets, and you can't take them to task for successfully meeting their goals, especially if you and others want them to take on the manufacturers in court, which can be a little costly.

P.S.  This professional and courtly manner is rather bland,
        boring in fact.  Let's go back to calling each other
        names.  What do we care if others "DON"T GET IT" ?  

[Ken_Cotner]

For the Philadelphia crowd and others who have played there...

Assuming the USGA would feel the need to "protect" Merion and its inferior length by dramatically narrowing the fairways and growing the rough, would you like to see the US Open there?  Or would you rather they pass?

And Patrick,

I agree...can you and TEPaul get back at each other's throats  

Ken

[Kevin_Reilly]

Member dues barely cover member expenses at the USGA.  In 2001, the USGA cleared $33M from its championships ($75M of revenue, $42M of expenses). All of the other stuff operates at a loss.  So yes, the USGA needs to make a lot of money on the Open if it is to conduct the wide variety of activities that it currently engages in, without eating into its investment account ($140M at the end of 2001, probably much lower today because of the market downturns).

Given low interest rates and financial market returns today, it appears to me that the USGA is in no position to incur any financial risk on its breadwinner, the Open.

Patrick Mucci, while turning $16M into $28M in 5 or 10 years sounds good, keep in mind that it would represent (unlevered) a return of 11.8% (if you did it in 5 yrs) or 5.8% (if you did it in 10 yrs).  Good compared to todays returns, but who knows if it is a good return considering the risk.

[Mike_Cirba]

I hate to say it, but what about Capitalism?

If Merion can only hold about half the normal daily gallery of, say Bethpage, how about doubling the price of the tickets?

Are they fearful it wouldn't be a sellout?  Duh!  

I'm encouraged that the "Feasibility Study" is strictly looking at the economics, and not at further changes to the course "inside the ropes".  This carrot has been dangled by the USGA for far too long so it's nice to see that one way or another, this whole question will be settled before too long.  

[Geoff_Shackelford]

I'm sorry, I must have missed something, who is the USGA's investment banker handling feasibility studies and real estate acquisitions?  I don't read the Journal -- Wall Street or Golf -- so I miss these announcements. Is the USGA listed on Nasdaq or the NYSE? What's their symbol, U$GA?  

This is all preposterous! Another leverage ploy. We know who the pigeon is for West Coast acquisitions. Please don't tell me Merion is serving as their pigeon for prospective East Coast clients, er, Open sites?  Who is the USGA trying to swing a better deal with for the 2010 or 2011 slots? Whatever happened to three straight on the west coast, last spring's spin to keep Riviera, Torrey Pine$, Olympic and Pebble Beach on their toes? Oh, the list of ploys is too long.

Am I the only one troubled by a non-profit organization that has stockpiled millions, while constantly claiming they need to watch their Open site selection to meet year-to-year expenses?  And we know this money obsession is not about building a war chest to strengthen their position with a lawsuit-minded equipment company. They ran scared when their portfolio had its greatest value.

Mr. Fay, the professional game has passed Merion by. If you admitted that, you'd admit your balls and implements team didn't do it's job on your watch.

[Jim_Kennedy]

......or they could just take their 200mil. and divvy it up between all the golfers in the US. Let's see, what will I do with my 8 bucks ??  

[Tony Ristola]

Well said Jeff.

What's this about the Russian Tee Room?  Any articles to link to?

[TEPaul]

Why doesn't the USGA try a little harder to have their other championships not lose so much money so the US Open does not have to subsidize them or at least to the degree it apparently does? Why don't they try a little harder to have the other things they do not lose so much money too? Why don't they simply try to charge whatever it takes (in overall revenues) to break even? If they try to do that and can't it would mean to me that the golfing public probably isn't interested enough in what they're offering.

Pat:

I recognize that the USGA generated a war chest to take on the manufacturers if they got sued. The USGA will never sue the manufacturers over B&I, though, so for them it's a bit of a waiting game, I guess!

But they're funneling a ton of their revenues into their foundation and then spending it on social engineering issues which I'm not sure I'm in favor of, particularly if the USGA itself doesn't really have its house in order with their core responsibilies first!

Mike Cirba is probably right, they should cap the crowds for a site like Merion and the reasonable max amount (like 18,000 per day-instead of the 30,000-40,000 of a Bethpage) and charge ticket prices accordingly. Then if they have a revenue problem with a Merion they should do another feasibility study for the future if that's what they're into.

But the more interesting issue with Merion, Fay and the USGA is whether this is just another go around with the USGA trying to tell Merion that they don't really think their course is obsolete for an Open and that the issue is only about lost revenue.

It seems like this might be just a nicer way of breaking it to Merion that the course is coming off the rota for the rest of time. But if the USGA really DOES feel that Merion is obsolete "inside the ropes"  admitting that as the reason they aren't taking the Open there again has to mean to me that they realize they've basically failed in one of their core responsibilities which is called controlling Balls and Impliments!

[Rich Goodale (Guest)]

Geof

Very well said

Kevin Reilly

Do you have a reference for the USGA's accounts?  I'd like to dust off my MBA and to figure out where all this money is going!

Tom P

Vis a vis "inside" and "outside" the "ropes."  Do you get the feeling that the cart is driving the horse here?  What is the USGA all about if not "inside the ropes", at whatever level?  When the calculus gives higher weightings to the number of corporate hospitality tents that can be erected on the grounds than the quality of the golf involved, I think that something is very, very amiss.

[Mike_Cirba]

Geoff Shackelford;

I agree with most of your points, and I know that Riviera is sort of the "Merion Westcoast", as far as the USGA and their very dodgy, somewhat manipulative selection process.  

I haven't read the article that Craig refers to but at least initially, I'm somewhat "encouraged" (probably too strong a word) to hear that some type of final report and decision-making is expected within a few months.  That's certainly a better approach than the ambivalent and contradictory statements that have been coming from Far Hills for the past two decades concerning Merion.  

I have to give Fay credit for his realized vision of bringing the US Open to Bethpage Black, as well, so I'm not entirely skeptical or in agreement with the assertion that he's using Merion as a decoy for negotiating purposes with other east coast clubs.  

Perhaps, as he says, he played it again and was enthralled by the possibilities?

[A_Clay_Man]

Why not limit it to 18 thousand spectators a day and then do the pay for view thing?

[Patrick_Mucci]

Mike Cirba,

If the USGA doubled prices for the Open at Merion, many on this site would scream that the USGA has made the USOpen only for corporate America, that they are eliminating the general public from watching the National Championship.

Let's at least be fair about it.

Kevin Reilly,

You also have to consider the purpose the building serves over that period of time.  If their goal is achieved,  
then money becomes a secondary or more distant consideration.

Not everything a non-profit organization does, is for profit.

[Mike_Cirba]

Patrick;

Yes, I'm sure you're right that someone (including me) won't philosophically like the USGA raising ticket prices to offset their "losses".  

Still, I'm not sure what they're charging these days for General Admission...let's say $75, for arguments sake, or even $100.

Is $150 to $200 too much to ask to witness the country's top golf tournament, considering that it's about what the average CCFAD is asking on a weekend?  
  

[Patrick_Mucci]

Mike Cirba,

Not in my mind, especially when you consider the price of a ticket to the World Series, NBA playoffs and the Super Bowl, but, the doubling of any ticket will elicit vociferous protests.

[Tim Weiman]

I share the view expressed by Geoff Shackelford and Tom Paul. Despite this "feasibility study", I doubt the USGA has any serious intent to bring the US Open back to Merion.

Talking about how the course can satisfy the requirements for a US Open "inside the ropes", but then rejecting the course for other reasons is nothing more than a smokescreen.

The USGA has let technology get out of hand. They just can't admit it.

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